State fair association meets Metro fair board demand for more money

The Tennessee State Fair Association has approved lease terms that “meet and exceed” those of a final offer from Metro, the group’s chairman John Rose told The City Paper Tuesday evening.

Lease negotiations for the 2013 state fair between the nonprofit TSFA and the Metro Board of Fair Commissioners had stalled, raising the possibility that the event might take place outside of Davidson County for the first time in its 106-year history. After a contentious meeting last week, the fair board, which oversees the Metro-owned Tennessee State Fairgrounds, issued a final offer, which Rose said the TSFA board approved out of a desire to move on with planning the fair.

“I wouldn’t say it was an easy choice, but frankly we feel like we’ve worked too hard and come too far to not keep moving forward,” he said. “So, while it will stretch our budget to its limit, we felt like the thing to do was to try to move beyond the current situation and keep the fair moving forward and hopefully silence some of the ongoing criticism that keeps flaring up.”

Rose outlined the agreed-upon terms, and an additional proposal, in a letter to the fair board, obtained by The City Paper.

Fair board chairman Ned Horton said he had received the letter and spoken with Rose, calling the development “very, very positive.”

“Getting over this hurdle I think is very good news for everybody that’s interested in seeing the fair get back on track and grow for the long term,” he said.

Fair board member Kenny Byrd sounded a similarly positive note.

“I can’t speak for other board members, but I’m personally very pleased by this offer,” he said. “I want to keep an open mind and talk to my board members, but I’m pleased by the TSFA’s willingness to hear our proposal and, frankly, meet it.”

With the negotiations behind them, Byrd said, the fair board and the state commission that now oversees the fair could “focus on the future of the fair and how we can work together for the long term success of an historic event.”

The apparent agreement is still tentative, however, pending final approval by the fair board at its Feb. 26 meeting. But it does, as Rose said, meet the terms of the fair board’s offer.

On top of a guaranteed advance of $50,000, the TSFA would give Metro $2.25 per ticket sold for the first 50,000 tickets, and $3.75 per ticket sold after that. They would also pay Metro $1.00 for every free ticket distributed, with a limit of 3,500 tickets.

Based on the attendance at the 2012 fair, according to Rose’s letter to the fair board, those terms would result in $179,268.75 in revenue for Metro, over 65 percent more than they made last year.

As per the Metro offer, Rose said the TSFA has also sought clarification from the state’s Department of Agriculture about whether the nonprofit could put up to $50,000 in grant money from the state toward improvements at the fairgrounds. The TSFA is awaiting a response from the department.

In an effort to “demonstrate our commitment to the Tennessee State Fairgrounds facilities,” the letter states, the TSFA board also voted to propose that the new lease be a three-year agreement. If a three-year lease were agreed to, the TSFA would commit to investing 25 percent of its net revenues each year in mutually agreed upon facility improvements. Rose said that could amount to up to $25,000 in additional investment in the grounds, and noted that the TSFA invested $15,000 in the grounds last year.

Horton said setting up the framework for a multi-year agreement made sense.

“You don’t want to be doing this around the clock,” he said, referring to the back-and-forth negotiations. “It’s counter-productive. So being able to have structure in place, you can build multi-year agreements, I think makes ultimate sense. I think even the state commission is proposing having five-year turnarounds for whoever runs the fair on their behalf. So it makes sense to build for the future.”

While the fair board has said their costs are potentially $100,000 more, they had been seeking a deal that would bring in at least $200,000 for the fairgrounds. In his letter, Rose writes that the TSFA believes the terms it has approved will “likely meet or exceed” that number.

As for uncertainty about the TSFA’s role in operating the fair in 2014 and 2015, and the future status of the fairgrounds facility, Rose said contingencies could be written into the final lease contract.

“We want desperately to work on making the fair more successful,” Rose said, “and hopefully get to a place where the headlines are about what new and interesting things are going to happen at the fair, as opposed to whether or not there’s going to be a fair.”

4 Comments on this post:

By:whitetrash on 2/13/13 at 3:46

No comments from those that do not support the TSFA?

By:Shane Smiley on 2/13/13 at 5:02

This agreement still leaves the Fairgrounds and the tax payers of Davidson County exposed to potential loss.
It is not a guarantee to cover the cost associated with holding the Fair.
In fact, this deal would still generate a net loss to the Fairgrounds.
In fact, it is a lesser guarantee than last years contract.
Last year, The Fairgrounds got all parking proceeds. Over $42k. This agreement gives that revenue back to the TSFA.

I understand the position the Fair Board is in.
They do not want to be the Fair Board responsible for the State Fair leaving this property for the first time in its 107 year history. So, If they take this deal, the Fair will stay on the property for this year.
The down side?
By taking a lesser deal, This Board will be the first board to require a subsidy from Metro.
The $200k guarantee + parking would decrease the subsidy required by nearly half.
Keep in mind, The other group bidding for the use of the property is money paid up front and eliminates the tax payer exposure to potential loss.
This is money that would go into the Fairgrounds account now. Not in September and October.

As for a 3 year lease, The TSFA is only contracted for this year to hold the TN State Fair.
The TN State Fair Commission is scheduled to hold an RFP for the ability to operate the Fair after 2013.

By:Shane Smiley on 2/13/13 at 5:10

I find it interesting that the TSFA claims that this agreement stretches their budget to the limit.
John Rose has stated many times over that they are reluctant to dip into the nearly $600 k they should have in their account to insure the Nashville Tax Payer does not see tax money going to support his company. In 2011, The TSFA gladly took on the task of operating the Fair with only 48k in their account. Now they have much more money and still want us, the tax payer to subsidize their company.

The Fair Board has asked many times to see the books of TSFA. TSFA has yet to produce those numbers. Transparency is apparently not in their best interest.

I hope the Fair Board will mandate a budget and a look at the books before they approve a lease that holds potential loss for the Fairgrounds.

By:bfra on 2/19/13 at 8:15

All associated with the Fair, in any way, should show how much money is in accounts, fiscally, not just "on paper".